Business Analysis of Kellogg

KELLOGG

Business Overview

Kellogg Company manufactures and markets ready-to-eat cereal and convenience foods in the United States and internationally. The company operates through U.S. Morning Foods, U.S. Snacks, U.S. Specialty, North America Other, Europe, Latin America, and Asia Pacific segments. Its principal products include cookies, crackers, savory snacks, toaster pastries, cereal bars, fruit-flavored snacks, frozen waffles, and veggie foods. The company also offers health and wellness bars, and beverages. It offers cereal products under the Kellogg's brand name; and cookies, crackers, crisps, and other convenience foods under the Kellogg's, Keebler, Cheez-It, Pringles, Murray, Austin, and Famous Amos brands. The company sells its products for grocery trade through direct sales forces, as well as use brokers and distributors. Kellogg Company was founded in 1906 and is headquartered in Battle Creek, Michigan.

Kellogg

Business Analysis of Kellogg

The Consumer Goods Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Kellogg compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Kellogg to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Kellogg with an interactive chart.

Revenue Growth: Kellogg reported a revenue growth of -3.8% year-on-year during 2016. Diversified Food Industry grew at 12.9% in the same period

COGS share of Revenues: As a percentage of revenue, Kellogg spent 63.5% of its total revenues on COGS. Diversified Food industry average (COGS share of revenue) in the same period was 67.8%

R&D share of Revenues: Kellogg R&D share of Revenues details are not available because either company does not share the data or we do not have it

SG&A share of Revenues: As a percentage of revenue, Kellogg spent 25.8% of its total revenues on Sales, Marketing, and General Administration (SG&A). Diversified Food industry average SG&A spending in the same period was 16.7%

Inventory share of Revenues: As a percentage of revenue, Kellogg spent 9.5% of its total revenues on Inventories. Diversified Food industry average Inventory spending in the same period was 10.3%

Accounts Payable share of Revenues: As a percentage of revenue, Kellogg invested 15.5% of its total revenues on Accounts Payable (A/P) Diversified Food industry average Accounts Payable investment in the same period was 10.9%

Accounts Receivable share of Revenues: As a percentage of revenue, Kellogg invested 9.5% of its total revenues on Accounts Receivable (A/R). Diversified Food industry average Accounts Receivable investment in the same period was 6.4%

PP&E share of Revenues: As a percentage of revenue, Kellogg invested 27.4% of its total revenues on Property, Plants, and Equipments (PP&E). Diversified Food industry average PPE investment in the same period was 22.8%

Intangibles share of Revenues: As a percentage of revenue, Kellogg invested 57.9% of its total revenues on Intangibles. Diversified Food industry average Intangibles investment in the same period was 139.8%

Net Margins: Kellogg Net Margins in the year 2016 were 5.3%. Diversified Food industry average Net Margins in the same period were 7.0%

Sector and Industry Association of Kellogg

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Consumer Goods sector is comprised of the following industries: Beverages; Personal Goods; Food Products; Diversified Food; Household Goods & Home Construction; Food Distribution; Tobacco; Toys and Games. The definitions for each of the industries is as follows:

Tobacco industry includes Manufacturers and distributors of cigarettes, cigars and other tobacco products. It also includes tobacco plantations.

Toys and Games industry consists of manufacturers and distributors of toys and video/computer games, including such toys and games as playing cards, board games, stuffed animals and dolls.

Industry Ranking of Kellogg

With $13 billion revenues, Kellogg ranked number 3 of all the companies in the US Diversified Food industry. There were a total of 18 public companies in the US Diversified Food industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Diversified Food industry by revenues during 2016 were:

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Industry Peers and Competitors of kellogg

Kraft Heinz Co with $26 billion revenues in the year 2016 was the number 1 Diversified Food company. Read this report to know the top competitors of Kraft Heinz and identify growth and cost optimization opportunities of Kraft Heinz

General Mills Inc with $17 billion revenues in the year 2016 was the number 2 Diversified Food company. Read this report to know the top competitors of General Mills and identify growth and cost optimization opportunities of General Mills

Conagra Brands Inc. with $12 billion revenues in the year 2016 was the number 4 Diversified Food company. Read this report to know the top competitors of Conagra and identify growth and cost optimization opportunities of Conagra

Hormel Foods Corp with $10 billion revenues in the year 2016 was the number 5 Diversified Food company. Read this report to know the top competitors of Hormel Foods and identify growth and cost optimization opportunities of Hormel Foods

Campbell Soup Company with $8 billion revenues in the year 2016 was the number 6 Diversified Food company. Read this report to know the top competitors of Campbell Soup Company and identify growth and cost optimization opportunities of Campbell Soup Company

J. M. Smucker Company with $8 billion revenues in the year 2016 was the number 7 Diversified Food company. Read this report to know the top competitors of Smuckers and identify growth and cost optimization opportunities of Smuckers

Revenues Analysis

This report provides the last five years revenues and revenue growth of Kellogg Co (K) from 2012 to 2016. Kellogg generated a total of $13 billion revenues during 2016. Kellogg reported a revenue growth of -3.8% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in January.

This report provides the last fifteen years revenues and revenue growth of Kellogg Co (K) from 2002 to 2016. Kellogg generated a total of $13 billion revenues during 2016. Kellogg reported a revenue growth of -3.8% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in January.

This report provides a comparison of Kellogg Co (K) revenue growth with Diversified Food industry growth during the last five years from 2012 to 2016. Kellogg reported a revenue growth of -3.8% year-over-year during 2016. The Diversified Food industry growth was 12.9% year-over-year during 2016. Kellogg growth was slower than the industry during 2016.